Multiple States

[Sandyt]

If a Client works in multiple states for the same company...should the W-2 show earnings from the different states show separately for example:
Total earnings for Federal purpose 1000.00
Home state CA 500.00
GA 250.00
IL 250.00
OR should the home state carry the total earnings also (1000.00)

[TomJ]

It depends on the state's rules. NY for example, requires the Federal amount on the NY state income line regardless of how much income was actually done in NY. That leads to asking the client for a breakdown of their income (usually they can get this from their final paystub) and adjusting the NY income on the NY return. Other states do it differently. The key is to make sure the state returns are using the correct amount that is taxable to that state. You can't trust the W2 for that information.

[Super Mom]

The W-2 should have a breakdown of the withholdings for the different states with the tax id numbers for those state accounts. My experience in NC, has been that the NC rides off the Federal AGI amount and the other states were non resident returns with a credit available for NC for the tax paid in the other states.

[Gary2]

It depends on the state's rules. NY for example, requires the Federal amount on the NY state income line regardless of how much income was actually done in NY. That leads to asking the client for a breakdown of their income (usually they can get this from their final paystub) and adjusting the NY income on the NY return. Other states do it differently. The key is to make sure the state returns are using the correct amount that is taxable to that state. You can't trust the W2 for that information.

For NY, they usually can't get the breakdown from their paystub. That's because NY, for non-hourly employees, requires the working day calculation on the IT-203-B. They don't go by how much was actually paid during the time in NY, the theory being that the Xmas bonus paid in December was partially earned during the stint in NY back in July.

[TomJ]

Gary, good point. NY should change their slogan to "I hate NY", because I do.

[Nashville]

Federal Court Case

This kind of stuff from NY should be stopped. You can forget anything happening in the NY court system, but there needs to be a Federal Court Case to put a stop to this kind of thing.

I'm not dreaming. There have been a few Federal rulings which have stopped over-aggressive state abuse for taxing income not earned in their state.